In today’s world, the word “money” is widely understood. Money is the most essential component of life in our rapidly changing world, the most valuable possession if you will.
Today, it is incredibly unexpected and important to consider how people transitioned from paying with cash, notes, and coins to paying even tiny sums of money digitally through platforms like phonepe, gpay, etc.
Even young children are aware of digital currency, notably Bitcoins and other cryptocurrencies.
What is Cryptocurrency?
A digital kind of money or currency exists in a virtual, post-banking world and is protected by cryptography or blockchain technology. Nowadays, practically everyone uses it and it is secure and safe.
A digital ledger, which is what blockchain technology refers to, is where these assets are securely kept and recorded.
Because cryptocurrency doesn’t require the time or involvement of third parties as bank transactions do, it is more popular nowadays. This is used for speedy, secure transfers in today’s fast-paced, hectic world.
On the sites that permit its exchange, cryptocurrency can be purchased and used. Not all platforms support that, but things are changing quickly lately.
What technology does it work on?
It utilizes blockchain technology, which is a digital ledger made up of a network of connected blocks.
Blockchain technology makes it difficult to falsify transactions and guarantees the security of transactions.
Every block continues to be validated, and the same is true of the transactions.
It is thought to be the primary factor in how cryptocurrency functions.
What are the types of Cryptocurrencies?
These days, everyone is familiar with this word, and you might be right if you guessed “bitcoin.”
The most well-known and practical cryptocurrency is Bitcoin, which Satoshi Nakamoto created and released in 2008.
There are an infinite number of cryptocurrencies available today, and each one is unique and has a variety of purposes and specialties.
There were 19 million Bitcoins in circulation as of May 2022, according to resources and academics, making it the most traded and used cryptocurrency.
Many more launches followed Bitcoin’s popularity, including those for Ethereum, EOS, Solana, altcoins, Litecoin, etc.
What risks should one be aware of when investing in Cryptocurrency?
Anything that has gone digital is vulnerable to online fraud, frauds, thefts, etc.
Blockchain technology guarantees its security, but there are still some hazards that should be considered.
Some are as follows:
Loss of user information: When sending or transferring cryptocurrency, there is no way to undo it if the recipient loses their password or enters the wrong address. This happens frequently, and those Bitcoins are lost as a result.
Parties are liable for some risks since they control the market’s prices and manipulate them, which can cause price swings and declines.
Advantages of Cryptocurrency: A Boon?
There are many advantages of investing and increasing one’s interest in Cryptocurrency.
Some of them are given below:
Every currency has a specific set number or amount. Its source code is available.
The government, any other organizations, or any other entity do not regulate or control cryptocurrencies. It is self-managed and self-governed.
Anyone may contribute to it and use it whenever they want. It is simple to use, so even those with less technological expertise can access and use it.
Because blockchain offers top-notch security and safety for all transactions and events, cryptocurrency is secure.
There are more opportunities to receive a significant return quickly.
Transactions and transfers with cryptocurrencies are simpler, safer, and quicker because there are no third parties involved.
Disadvantages of Cryptocurrency: A Bane?
As anything which has advantages, has disadvantages too, so here we go:
As they aren’t recorded by the government or big associations mainly third parties, many unlawful transfers are made specifying the use and involvement of the dark web.
As if one loses access to their passwords or devices, there’s no way to get their profit earnings back.
There is no chance of getting the currency back after the transfer and the same goes with cancellation if one’s done, it cannot be canceled.
Due to its presence in online public markets, Cryptocurrency suffers from price instability.
Cryptocurrency wallets can be hacked resulting in loss of earnings.
When mining Cryptocurrency, one has to use a large amount of energy, and thus using a large number of energy results in affecting the environment.
There’s a case quite popular about the selling of drugs through the dark web, which is the Dread Pirate Roberts case. As government can’t track it, things like these keep happening.
FBI might take the responsibility of tracing and tracking when events like these occur.
Due to the rapid use, the cost of mining rises.
As it’s still not accepted generally by the government, there are only a few places or platforms where one can use it thus resulting in restrictions for usage.
Knowing how cryptocurrency functions currently, one can determine if it is a boon or a curse for society.
Everything has repercussions, as it is believed that anything utilized within reason is a benefit and unlikely to become a curse.
Having a solid knowledge of cryptocurrency and using it appropriately are prerequisites for investing in it.
Although investing in cryptocurrencies is a very wise move, it is again subject to market fluctuations and may result in losses.
Since everyone is different and has various expertise, resources, and facilities, this post does not require anyone to invest in cryptocurrencies without any background or knowledge in the field.